Every ten years, the Central Government of
India sets up a Central Pay Commission (CPC) to revise the pay scales of its
employees. Since these pay scales are largely adopted by state governments as
well, they influence the income of millions of households.
During 2013, time seemed to be running out
for the constitution of the next Commission before the beginning of the
election cycle. But on September 25, 2013, a week before the election-related
Code of Conduct became effective, the government set up the Seventh Central Pay
Commission. This commission will review and revise the salary and pensions of
50 lakh (5 million) or more Central Government employees. Now that it is
constituted, the Commission will most likely be able to implement its
recommendations by the scheduled date of January 1, 2016.
Duties
of the Seventh Central Pay Commission
On Feb 28, 2014, the Cabinet approved the
terms of reference of the 7th CPC. The CPC is expected to suggest a merger of
50% of DA (daily allowance) with basic pay, which would increase the gross
salary of Central Government employees by around 30%. The Cabinet has approved
an additional 10% DA over the existing 90% admissible DA, effective January 1,
2014. This increase would be paid in cash after the disbursement of March
salary. The 7th CPC is required to submit its recommendation within a year and
a half of its date of constitution.
Major
issues to be resolved
1. Pay Parity between IAS &
other government services: Hundreds of letters are sent by IAS officers to
the concerned government officials apprehending that the seventh central pay
commission may try to restore parity between different government services in
terms of compensation and career progression. It is to be seen how 7th CPC and
government deals with this crucial issue.
2. Pay parity with private sector: Central
services have demanded to every pay commission to create parity with the
officers of private sectors and make their salary structure comparable to
later.
3.Retirement age: There is no
denial of the fact that working efficiency of an employee is influenced by the
increasing age but experience often weighs heavily over the age factor. Even
then looking at attitude of present government impression is clear that pay
commission is signaled to reduce the retirement age of government employees.
Whatever circumstantial indications are available it shows that either 33 years
of service of 60 years of age (whichever is minimum) is likely to be recommended.
If media reports have ant substance of truth, under performers may be asked to
opt for voluntary retirement after reaching the age of 55 years.
4.Pay gaps between least & highest
paid employees: In 1947, gaps in salary between lowest and highest
paid government employee was in the 1:41 ratio that got reduced to 1:12 by
subsequent pay commissions. It has to be observed whether this gap is widened
or reduced by the 7th CPC.
5. Continuing with grade pay
system? It would be interesting to note whether 7th CPC continue grade
pay system or adopts old pay scale system. As per reliable sources, grade pay
system will not longer exists in 7th CPC structure. A table is circulating in
the media predicting projected pay scales believed to be suggested by 7th CPC.
Members of the Seventh Central Pay
Commission
Chairman - Ashok Kumar Mathur (Former Supreme
Court Justice and Former Chairman, Armed Forces Tribunal)
Full time member - Vivek Rae (oil
secretary)
Part time member - Rathin Roy
(Director, NIPFP)
Secretary - Meena Agarwal (OSD,
Department of Expenditure)
Implementation
Dates of Previous Pay Commission Recommendations
·
January
1, 1986 - 4th Pay Commission
·
January
1, 1996 - 5th Pay Commission
·
January
1, 2006 - 6th Pay Commission
The Pay Commission Process
Implementation of a Pay Commission's
recommendations always leaves behind a few anomalies for the next commission to
resolve. Making recommendations for pay revision is a long process, involving
discussion with various organizations, submission of demands by representatives
of unions and associations, and evaluating the potential financial impact of
these demands on the national exchequer. Representatives of various
organizations are asked to make presentations. The Pay Commission examines service
conditions, pay, and perks given to employees.
All the earlier Commissions set up to
revise the pay of Indian Central Government employees—except the 6th CPC—took
more than three years to submit their report. The Sixth Pay Commission
submitted its report within just eight months. Nevertheless, such a quick
turnaround cannot be taken for granted for future Pay Commissions, since the
timing of report submission and the nature of the recommendations are
influenced by political and economic considerations.
What
are the hottest rumors?
1. Central Government is willing to merge
50% DA with basic pay with effect from 1.1.2015 - All Govt. employees would be
happy if it has happened,
2. Age of Retirement will be determined
based on completion of 33 Years of service or at the age of 58/60/62/65 Years
(depending on existing retirement age in various departments) whichever is
earlier.
Latest update
·
Union
Cabinet chaired by PM on August 26, 2015 gave its approval for extension to 7th
CPC to submit its report by the end of December 2015.
·
As
per reports in media, 7th CPC is likely to maintain status quo on the
retirement age. However, some unconfirmed sources didn't rule out the
possibility of a suggestion from Pay Commission to the government that the
earliest of either 33 years of service length or 60 years of age may be
considered as a criteria for superannuation of central government employees.
·
Recommendation
for pay hike is likely to be low after merging the existing basic pay and
dearness allowances. Merging the both component mean 155% rise and adding
25-35% extra makes it 1.8 to 1.9 times in terms of basic to basic.
·
Grade
Pay is likely to be abolished by 7th CPC and gaps between pay scales may widen
and hence 7th CPC scale may some what follow the earlier pay formats (as in
3rd, 4th or 5th CPC)
·
Government
may not risk any adverse effect of disclosures related to pay recommendations
on election prospects in upcoming Bihar elections.
Rationale
for the Seventh Pay Commission
The constitution of the Seventh Pay
Commission is justified for the reasons listed below.
·
Daily
Allowance (DA) has already exceeded 100% of basic pay, and it cannot be merged
with basic pay due to the recommendations of the 6th CPC.
·
Since
the wages of some categories of non-government employees are revised at
intervals of less than ten years, wages should be revised every five years for
central government employees also.
·
Prompt
pay revision of Central Government employees will help reduce the increasing
disparities between Central Government employees, public sector employees,
bankers, and private sector employees.
Other expected tasks for the 7th Pay
Commission include resolving anomalies created by the 6th CPC and addressing
bonuses and problems related to the new pension program. All sections of
employees will get an opportunity to present pay-related problems to the new
Pay Commission and request redress of their grievances.
A new demand gaining support is
constitution of a National Pay Panel that will make recommendations for all
employees of the country. Since most of the states have adopted for their own
employees the pay structure suggested by the 6th CPC for Central Government
employees, uniform recommendations would remove discrimination between state
and central employees. Recommending a uniform wage structure for each and every
employee of India would also reduce pay disparities between private, public and
autonomous organizations.
My poll indicates that 39% believe that
Central Government employees are likely to get a threefold raise in salary.
This is consistent with what was done in the past by earlier pay commissions.
Given the existing trend in DA increase, salary may increase 2.3 times by the
implementation date of the 7th CPC. Projected pay scales under this assumption
are shown below.
A projection based on media report is
reproduced below. However, a fake report in the name of 7th CPC is also being
circulated in the media by some miscreants. 7th CPC has been granted extension
by the Govt. of India to submit it report by the end of December 2015. It would
be clear after the submission of report by 7th CPC what content it has
submitted to the ministry for acceptance. Further, each and every point in the
report will be examined by the cabinet and approved after considering all the
implications. Till then enjoy and go through the speculations made by experts.
7th
CPC as per some media reports has eliminated grade pay system and recommended
pay scales similar to earlier pay commissions.
A better way to get rid of corruption in
public life than across-the-board increases would be to legalize a commission
on services by each and every employee. This would also help improve the
productivity of private sector employees. In some private or autonomous banking
institutions, for example, employees are paid a reasonable percentage for
accomplishments such as encouraging customers to open more accounts.
Wage revision is expected for Central
Government employees effective January 1, 2016. The newly constituted Pay
Commission will get two years to review the existing wage structure and suggest
a new one, to meet the expectation of employees, and also to increase
efficiency at work at a pace with the growth in the economy.
The Seventh Pay Commission needs to
introduce more parity into the pay structure of various sectors. Employees in
all departments have been vested with more responsibilities, but their pay
structure still belongs to the British period. People serving in the police and
armed forces have very low salaries although their duties have become
enormously more challenging. Government should increase the compensation to its
officers for any service-related casualty. Police forces working under adverse
conditions and in remote areas must be paid high wages and good benefits so
that more people join these organizations.
The new pension system implemented based on
the recommendations of the 6th CPC needs to be revisited and reviewed by the
7th CPC, since the adequacy of fund management depends on market forces and the
capabilities of fund managers. The 7th Pay Commission needs to take some
vigorous action, based on discussions with trade unions, to come out with a
more amicable solution for the new pension scheme.
These are some of the things people
genuinely expect from the government, but time will tell how much people get
from the CPC.
Source of Article: hubpages
No comments:
Post a Comment